Russia’s Proposed Beer Tax Worries Brewers

Local and international brewers are deeply concerned about a proposed beer tax due to take effect in Russia next year. According to a report in The Wall Street Journal, the bill, currently in draft form, calls for a 200% tax hike in 2010 with an 11% increase in 2011 and a 20% increase in 2012. Brewers Carlsberg, Heineken NV, SABMiller, and Anheuser-Busch InBev have all voiced concerns about the pending bill. The proposal, intended to curb alcohol abuse in Russia, has yet to be approved by the Russian president.

The new proposal would apply to both local and imported beers. The proposed tax would raise the price of beer from 3 rubles per liter to 9 rubles per liter. The average beer in Russia sells for around 50 rubles per liter. The bill also calls for tax increase on vodka and other liquor, but the fee is much smaller, only 10%. This had caused outrage among several brewers, with many arguing that Russian consumers will damage their health by switching to vodka. Beer is the second most popular drink after vodka and many Russians even view it as a healthier alternative. Russia is the world’s third largest beer market.